Andrew Layton, chief acquisition officer for Atlanta-based Student Quarters, knows that from a commercial real estate investment standpoint, the student housing sector possesses a key advantage: the relative permanence of many flagship universities nationally.
“There is no risk of the University of Kentucky uprooting itself from Lexington and moving to Frankfort anytime soon. In the conventional multifamily world, neighborhoods come, neighborhoods go. What was hot yesterday may not be so hot today. What was cold yesterday may be the flaming new market tomorrow. That’s just not the case in what we do,” emphasized Layton, who leads the origination and underwriting efforts involving both the acquisition and development of student housing assets for the Student Quarters’ investors.
“There’s a sense of permanence [surrounding these academic institutions], and if you can get on the ground and do your due diligence, you can figure out relatively easily where things work and where things don’t work in a student housing market.”
Student Quarters owns and operates over 13,000 beds nationally, stretching east to west from Clemson, South Carolina, to Tempe, Arizona; and north to south from East Lansing, Michigan, to Tallahassee, Florida.
The insights from Layton, who’s worked in the student housing industry since 2008, came during a panel session Monday on the opening day of the 2025 InterFace Multifamily Southeast Conference at the InterContinental Buckhead in Atlanta. Co-hosted by France Media’s InterFace Conference Group and Multifamily & Affordable Housing Business magazine, the two-day event attracted just over 300 attendees.
Editor’s note: InterFace Conference Group, a division of France Media Inc., produces networking and educational conferences for commercial real estate executives. To sign up for email announcements about specific events, visit www.interfaceconferencegroup.com/subscribe.
The panel, titled “The Student Housing Market A-Z,” was designed to educate conventional multifamily owners, operators and developers on the opportunities and challenges this niche sector presents and how it differs from multifamily.
Victoria Marks, director for student housing investment sales at Berkadia, served as session moderator. Joining Marks and Layton on stage were fellow panelists Charlie Matthews, general manager with College House; Ashly Poyer, senior vice president at PeakMade Real Estate; and Heather Tate, senior vice president with Blue Vista Capital Management.
Drawing the Distinctions
Purpose-built student housing is designed specifically for the needs of the student renter and differs from conventional multifamily housing product in three primary ways, according to Tate of Blue Vista, a Chicago-based real estate owner and operator that has acquired and/or developed over $3.8 billion in student housing properties since its founding in 2003.
1. The floor plans of student housing properties typically feature bed-to-bath parity. In other words, one bathroom per bedroom. One exception to that rule can be found in core urban markets where there may be “double-ups,” which refers to double-occupancy bedrooms. A single room designed for two beds has both beds occupied and the two occupants share one bathroom.
The common areas are designed to be larger than traditional multifamily units to accommodate multiple roommates. The amenity offerings are also geared more toward student users, so computer labs, study rooms and group communal areas are part and parcel of the design.
2. Student housing operators lease by the bed, which means the student and his or her guarantor is only responsible for their individual bed. “If your roommate decides to study abroad, transfer schools or drop out, you’re not on the hook for the rent,” said Tate.
The leases are for 12 months, but it’s tied to the academic calendar, not the traditional Gregorian calendar (January through December). “Typically, you are looking at an August move-in and a July move-out. You’ve got a very tight two-week turn period in which you are getting ready to move all of your residents in for the following [academic] year,” explained Tate. In contrast, the conventional multifamily product has more year-round leasing demand.
3. The target demographic for student housing is persons age 18 to 23, which is much younger than the conventional multifamily product. Consequently, this age cohort generally needs a lot more help navigating through the leasing process and understanding their obligations as a renter. “Operationally, we’re staffed to be more of a hands-on model as far as leasing and maintenance,” said Tate.
‘Nuanced complexities’
Unlike the conventional multifamily sector, the student housing markets are strictly defined by where the universities are located, said Poyer. PeakMade Real Estate, which manages just over 40,000 student housing beds, has 90 properties in 57 different markets. The company also has a portfolio of multifamily assets that it manages totaling about 4,000 units.
“That spread [of student housing properties] across the United States and Canada is very different than multifamily where you really focus on saturating and concentrating on growth by market,” she said. Consequently, the company’s regional managers in the student housing space are frequently traveling across states while on the job.
There are “nuanced complexities” in the student housing universe, emphasized Poyer. For example, most student housing properties are fully furnished, so there’s a lot of work that goes into cataloging furniture, updating furniture and placing orders early enough so that there’s no backlog before move-in day.
First-time renters typically don’t know how to set up an automated clearing house (ACH) that enables the direct transfer of rent payments from a student’s bank account to the housing provider’s bank account. They often don’t know how to sign up for utilities or how to resolve conflict with their roommates.
About 85 percent of the student housing renters at the properties PeakMade manages have a guarantor, typically a parent. This introduces a second party into the leasing agreement and significantly increases the consumer base that PeakMade manages, especially when it comes to payment processing.
As noted earlier, leases are tied to the academic calendar, with a high volume of leases starting and ending at the same time (typically August to July). This leads to an intensive, high-pressure “turn season” that requires a large volume of applications, move-ins and move-outs to be processed in a very short window.
“Move-in day is sometime mid-August, and leasing kicks off sometime in mid-August, which means that you might be advertising and nurturing leads from August to July, depending on when the students get accepted, depending on when they’re ready to make a decision, or their roommates are ready to make a decision. There’s a lot more factors at play than a traditional multifamily renter who is likely looking at a 60- to 90-day window and is planning to make a decision fairly quickly,” said Poyer.
Healthy Vital Signs
According to College House’s latest national student housing report, which was produced Sept. 15 following the 2025-2026 leasing cycle, the average rental rate per bed was nearly 24 percent higher than it was five years ago. Supply-constrained markets continue to command premium pricing.
The national average rent was $1,006 per bed as of September 2025, a 3 percent year-over-year increase. While growth has moderated from recent highs, rates remain on an upward trajectory, fueled by supply constraints and steady enrollment, stated College House, which tracks more than 280 collegiate markets and over 3,000 purpose-built student housing properties
National occupancy as of September 2025 averaged 91.8 percent, down slightly from the prior year. Performance was strongest in the Southeast (93.3 percent) while occupancy in the West region dropped below 90 percent for the second consecutive cycle. Markets absorbing new supply, particularly in the Southeast, continued to show resilience. The decline in the Southwest suggests growing lease-up challenges for vintage and outlying assets, stated College House.
“What’s interesting, and everybody asks, ‘When’s the party going to be over?’ The downside to that question is that it’s becoming very, very challenging to build in a lot of these student housing markets,” said Matthews. Oftentimes, the high cost of development is the problem, and that’s reflected in the drop-off in deliveries.
Student housing developers delivered between 50,000 and 52,000 beds annually from 2014 to 2019, but from 2020 to present day, the volume of deliveries slipped to 35,000 to 36,000 beds annually, roughly a 30 percent decline, according to Matthews. The drop-off in development has coincided with an increase in enrollment at Tier 1 universities.
“You have this supply-demand imbalance, which benefits the owners that are in those markets. From a development standpoint, it has definitely become a lot more challenging, more so on the equity side because you have to get a little bit more creative these days,” explained Matthews.
“Everybody always asks me how I feel about student housing today and for the next two to three years. Overnight, we’re just not going to add 100,000 beds into the pipeline. As much as some of those lovely developers would love to do that, that’s just not feasible. So, good times will continue,” he added.
Big Schools Thrive
Enrollment at the flagship schools continues to grow, by and large. For example, enrollment on the main campus of Purdue University in West Lafayette, Indiana, increased 5.6 percent in the fall of 2024 on a year-over-year basis due to an increase in the student yield rate (the percentage of accepted students who chose to enroll), according to Layton. That brought the total enrollment to 55,119 students.
However, the enrollment spike put pressure on campus housing and infrastructure, prompting the university to intentionally reduce the incoming freshman class for the fall 2025 semester. The student population on the main campus was reportedly 468 lower in fall 2025 than in fall 2024.
“Was there something fundamentally wrong all of a sudden with Purdue’s market?” Layton asked rhetorically. “No, it was a strategic decision made by the president of the university after enrollment the previous year increased by 5.6 percent, which for a school with over 50,000 students is unheard of,” said Layton.
“Now, your directional schools, your Western Michigans of the world, your East Tennessee States of the world — you’re going to continue to see some issues there with those smaller schools. It doesn’t mean there aren’t good investment opportunities. But if enrollment is a key concern for you and your constituency, it can be problematic on that end,” Layton added.
Enrollment at Western Michigan University, based in Kalamazoo, has fallen from over 23,500 students to 17,331 in the past decade, according to The Detroit News in a Nov. 16 article published online that was titled “Michigan’s Regional Universities Fight Back After Years of Enrollment Decline.”
The university has reinvested in its aviation and product design programs to showcase its unique strengths. The aviation program has a long history dating back to 1939 when aviation maintenance was added to the curriculum at Western State Teachers College.
East Tennessee State University in Johnson City just welcomed 2,284 students for the fall 2025 semester, the largest first-year class in university history. Located in the Appalachian Mountains, the university has a total enrollment of nearly 14,000 students.
Bullish on SEC Markets
The panel moderator asked Layton which student housing markets in the Southeast he considers to be among the strongest and why. “I still favor a lot of the SEC (Southeastern Conference) markets long-term,” said Layton, including the University of Georgia (UGA) in Athens because of the strong renter demand and the development challenges, which have served to strengthen the real estate fundamentals in that market.
Developable sites near UGA are limited, noted Layton. “It’s very hard to find compelling dirt to develop. And if you do, guess who you’re competing against? Wes Rogers and Landmark to get said dirt.” (Wes Rogers is the chairman and CEO of Landmark Properties, one of the largest student housing developers in the United States that is also headquartered in Athens.)
“It’s really hard to find those compelling sites that work,” he added. “It doesn’t mean there’s not a need.”
Meanwhile, applications for admission to UGA from out-of-state residents have gone “through the roof,” Layton pointed out. The university received over 47,850 applicants for the fall 2025 semester, which was a record-breaking number.
Of those applicants, the university accepted more than 15,800 students. Approximately 55 percent of the total applications were from out-of-state or international residents. UGA’s goal is to enroll a first-year class of 80 percent Georgia residents and 20 percent non-resident students.
Layton said there will undoubtedly be instances where some irresponsible developers build properties that make no sense in a given market, but he remains bullish on the SEC markets as a whole. He cited the University of Mississippi (Ole Miss) in Oxford as an example.
“There’s a lot of supply that’s coming to Oxford, Mississippi, but the school itself continues to grow and thrive. Last year (2024) was the first year ever in the history of the institution that the University of Mississippi had more out-of-state students than in-state students, 54 percent to 46 percent overall,” said Layton, adding that the trend has benefitted the state of Mississippi as a whole. “It drove a lot of those in-state students down the road to Starkville (home of Mississippi State University). I own two assets there. Trust me, Starkville flourished.”
— Matt Valley